A Rotherham broadband company is set to make job cuts and shed millions in debts after plunging £7m into the red.
Origin Broadband is seeking a Company Voluntary Agreement that would reduce the 110 staff by 42 per cent - some 44 jobs - and repay unsecured creditors owed £5m a total of £2m.
The proposed deal comes after the firm fell to a £7m loss in the year to March ‘due to bad debts, increased staff costs and weak cost control’, according to a report by accountants Chamberlain and Co.
It states ‘systems and processes’ were inadequate to deal with 192 per cent growth in residential customers in 2017/18, peaking at 36,000 - up from 4,000 in November 2016.
The firm was set up by chief executive Oliver Bryssau and director Henri Wust in January 2011.
Last month they contacted an insolvency practitioner at Chamberlain.
A report sent to creditors states a CVA offers the best chance of them receiving the most money, compared to an administration or liquidation process.
It says it is also the best choice where the underlying business is strong. The firm intends to raise a further £2m from investors, it adds.
An employee contacted The Star claiming a redundancy consultation was launched on November 14 and staff had been put on ‘gardening leave with little or no possibility of return’.
‘The company is desperately trying to downplay the whole charade and bolster morale among the workers, but will be announcing the list of employees to be made redundant on December 14’.
In January, Origin spent £2.5m on a move from Doncaster to new premises on Callflex Business Park, Wath, Rotherham.
At that time it employed 149 and rented a call centre with room for 700. Bosses said then they were on target to have more than 250,000 customers by 2020.
Origin received £5m from Calculus Capital in two funding rounds last year and claimed to have the sixth largest broadband network in the UK.
The CVA proposal is set to be put to creditors on December 20, If agreed, the firm would pay unsecured creditors £55,835-a-month over 36 months, some £2m.
Mr Bryssau declined to comment.